CapitaMalls Asia acquires Minhang Plaza and Hongkou Plaza for $949.7m
CMA’s post-acquisition effective stakes in the properties will be 65% and 72.5% respectively.
According to Phillip Securities, the proposed acquisitions will be funded through internal funds and external borrowings, and are subject to the relevant governmental approvals.
Here’s more from Phillip Securities:
Increase stakes in Minhang Plaza and Hongkou Plaza in Shanghai
The purchase prices were derived based on the latest valuation of Minhang Plaza at approximately S$632.5mil (Rmb23,059 psm), and Hongkou Plaza at S$1,278.1mil (Rmb30,990psm).
The management expects the mall of Minhang and Hongkou to generate yield of 5% and 4% respectively after the first year of its opening. Occupancy level at Minhang is c.98% committed while Hongkou is c.90% commited. Following these acquisitions, CMA would have spent approximately $1.5bil YTD, out of the committed $2bil total investment value for FY11.
Maintain Buy with fair value raised from $1.75 to $1.76
Consequently, fair value is raised marginally from $1.75 to $1.76, representing a potential upside of 49.8% to its latest closing price. We believe the stock is heavily oversold at the current level (PBR 0.74x) given its strong development pipeline of retail malls in China and Singapore. We maintain our Buy recommendation.
Photo credit: CapitaMalls Asia website